The World-Famous Staten Island Hip-Hop Collective Has a Government Informer Working Within Its Ranks; at the Same Time, the Group Is Being Investigated by the Feds for Gunrunning. Coincidence?

Caruso got his big break when downtown DJ Keoki heard Repete spin at a West Village after-hours club. Keoki invited Repete to perform at one of the Limelight's decadent Disco 2000 extravaganzas. Keoki introduced Repete and Caruso to Peter Gatien, who suggested the Staten Islanders start throwing Thursday parties in the small upstairs chapel area. The Inner Mind parties, as they were called, quickly outgrew the chapel space, then soon moved to the main floor on Fridays.

At Caruso's new Future Shock parties, shirtless juvenile delinquents from Brooklyn and Staten Island, high on Ecstasy and angel dust, slam-danced to hardcore beats imported from Belgium and the U.K. Tattooed kids who would normally be fighting each other in the street were instead embracing each other on the dancefloor, their natural-born machismo melting under the influence of the drugs. "It was like playing in a penitentiary," jokes Moby, who, years before he was nominated for a Grammy, performed at Lord Michael's Limelight events.

"There was a huge response," says Steven Lewis. "It was the only place in Manhattan that played techno music at the time. But the sudden success of Future Shock transformed Caruso. Practically overnight, he morphed from this shy, polite guy into a wannabe gangster who was always talking about having people beaten up or killed."

One time, he threatened to have Lewis kidnapped because Lewis wasn't letting in Lord Michael's drug-dealer friends from the neighborhood: "Caruso told me that I'd made the wrong people mad, that someone called Al Dente wanted to whack me. I thought he was kidding. But sure enough, one day I get a phone call: 'Hey, this is Al Dente. If you don't start letting my boys into the club, you're gonna have to deal with me.' I didn't know whether to be afraid or order the pasta special."

In the early days, Caruso claimed he was building a new youth movement, populated by "a new breed"the antithesis of the "Guido" stereotype that bedeviled young Italian American males. His crowd listened to progressive music and got along with blacks and gays. But really, he was laying the foundations for a criminal organization. He gathered around him a small army of Italian American toughs, culled from Brooklyn street cliques like the Bath Avenue Crew and Together Forever.

"After the initial popularity of the Future Shock parties, a lot of gangsters started coming," explains Repete. "They saw the success we were having, and they wanted a piece of it. Greed and ambition were Caruso's undoing. All he needed to do was stay with the scene and he would have ended up making more money than he did by robbing people and selling drugs."

"In the beginning, Caruso seemed like a regular neighborhood guy," adds Repete. "I had no clue what a scumbag he would turn into."

Caruso's first major robbery of record occurred early in 1992. Goldilocks, normally a supplier of Ecstasy, wanted to buy 20,000 hits from Caruso. When Goldilocks's assistant, Mr. Purpleso-called because of his purple hair and clothesarrived at the door of Caruso's posh Gramercy Park apartment, $180,000 in hand, two of Caruso's goons emerged from a side door, announced they were undercover drug cops, and pushed Purple in. Purple was ordered to lie down on the floor, where he was handcuffed. Caruso was also handcuffed as part of the scam.

Caruso's duplicity didn't end there. He subsequently paid his lieutenant Robert Gordon $5000 to convince Goldilocks that Caruso had nothing to do with the rip-off. Goldilocks bought the story, and continued to do drug deals with his Lordship.

Less than a year after the robbery, in March 1993, Caruso's partner in crime Damon Burett was found shot in the head in the loft space at Caruso's pad. When not dealing drugs for Caruso, Burett worked as Lord Michael's housekeeper in return for room and board. He was widely regarded as a sweet guy, but emotionally unstable.

When the police arrived, Caruso was holding a .32 pistol. The medical examiner ruled Damon's demise a suicide, but private eye John Dabrowskia retired Nassau County homicide cop working for Gatiencame to believe that Caruso used a suicide attempt by Burett the previous Sunday to cover the murder. On the witness stand at the Gatien trial, Caruso denied killing Burett. But Dabrowski claims that, given the extraordinarily high level of Valiumthe equivalent of over 100 pillsfound in the housekeeper's blood, it's doubtful he could have held a gun, let alone put it to his head and squeezed the trigger. And the contents of Burett's suicide note raise more troubling questions: "I took pills and lemons [slang for quaaludes]. It was better than blowing my brains out." Why would somebody describe one method of killing himself and do precisely what he said he wasn't going to do?

When key Caruso associate Paul Torres was arrested in 1997, he told the DEA that he thought Lord Michael killed Damon because Burett was being investigated for narcotics. Damon's father, Raymond, confirmed to the Voice that his son was picked up on serious drug charges roughly a year before his death.